Low unemployment rates main reason for Kuwaitis
Economist Steve Hanke of the Johns Hopkins University says Kuwaitis are the happiest Arab people and the second happiest people in the world, after Switzerland on a list of 157 countries as shown by the Misery Index, reports Al-Rai daily. The Hanke annual Misery Index sums up unemployment, inflation and bank lending rates minus the change in the real per capita GDP. In his annual index, Hanke attributed the main reason for the happiness of Kuwaitis to low unemployment rates, which is the same factor for the happiness of the Swiss.
According to the index, Kuwait, despite the country’s political differences, achieved a strong performance in all fields in 2022. Based on Hanke’s calculations, the negatives were minimal, while the good indicators were strong (annual real GDP growth reached 4.5 percent). Thanks to the strong economic performance, Switzerland, Kuwait, Ireland, Japan, Malaysia, Taiwan, Niger, Thailand, Togo and Malta occupied the top ten positions as the happiest countries in the world in 2022.
In contrast, Zimbabwe, Venezuela, Syria, Lebanon, Sudan, Argentina, Yemen, Ukraine, Cuba, Turkey, Sri Lanka, Haiti, Angola, Tonga and Ghana were the 15 most miserable countries in the world. The idea of the Misery Index was originated by the well-known economist Arthur Okun, who served as Chairman of the Council of Economic Advisers during the Johnson administration and developed the original Misery Index for the United States.
The Okun index is equal to the sum of inflation and unemployment rates. The index was later modified by Harvard University professor Robert Barrow who modified the misery index by also including the 30-year government bond yield and the output gap to real GDP. Then Steve Hanke also modified Barrow’s version of the misery index by replacing the output gap with the real GDP per capita growth rate and replacing the 30-year government bond yield with the lending rate. Hanke argues that the higher the interest rates, the higher the cost of credit, and with it the more miserable the borrowers.
Source- Arab Times.
